With the year 2023 nearing the half-way point, the World Bank revised its forecast on the Philippine economy seeing a 6% growth (versus the previous 5.4% growth forecast), according to a BusinessWorld news report.
To put things in perspective, posted below is an excerpt from the Manila Bulletin news article. Some parts in boldface…
THE PHILIPPINE ECONOMY is likely to grow by 6% this year amid strong domestic demand and despite elevated inflation, the World Bank said, raising its forecast from 5.4% in January.
A recovery in jobs, improved consumer sentiment and strong remittances from Filipinos overseas would drive local consumption, the multilateral lender said in its Global Economic Prospects report on Wednesday.
“Despite external challenges, high domestic inflation and tight monetary conditions, domestic demand has once again remained resilient, fueling growth,” World Bank Country Director for the Philippines Ndiame Diop separately told a virtual news briefing.
The latest growth forecast is the lower end of the government’s 6-7% growth target this year. The Philippine economy grew by 6.4% in the first quarter, slower than 8% a year ago and 7.1% a quarter earlier.
“Despite weak global conditions, our upward revision reflects this continued strength in domestic demand,” World Bank Philippines Senior Economist Ralph van Doorn said.
But the potential global slowdown could still affect growth. “Although the global economy displayed remarkable resilience in early 2023, economic conditions will remain subdued for the rest of 2023,” Mr. Diop said.
He said global growth is expected to wane due to “persistent inflation, slowdown of global trade and the effect of recent monetary tightening.”
The World Bank expects global growth to slow to 2.1% this year, though this is higher than its earlier 1.7% projection. It also sees global growth reaching 2.4% next year and 3% in 2025.
“Risks remain tilted to the downside,” Mr. Diop said. “Recent episodes of market instability have raised concerns of a potential spillover. The possibility of further monetary tightening amid sticky core inflation could raise the cost of global financing and lead to a more pronounced and prolonged global slowdown.”
Persistent inflation remained a cause for concern, the World Bank said.
“Although our baseline forecast (shows) inflation will decelerate, it is still the main challenge,” Mr. van Doorn said.
The World Bank expects Philippine inflation to average 5.7% this year, higher than its earlier 4.2% forecast.
Let me end this piece by asking you readers: What is your reaction to this recent development? Do you agree with the World Bank’s analysis about economic growth for the Philippines this year? Do you think the Philippine economy can do better than expected by the end of 2023?
You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.
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